Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2/A Pre-Effective Amendment to Registration of 142 740K
Securities by a Small-Business Issuer
2: EX-1 Underwriting Agreement 54 225K
3: EX-4.2 Instrument Defining the Rights of Security Holders 31 107K
4: EX-4.3 Instrument Defining the Rights of Security Holders 38 141K
5: EX-4.4 Instrument Defining the Rights of Security Holders 9 46K
6: EX-5 Opinion re: Legality 3 14K
7: EX-9.1 Voting Trust Agreement 6 27K
8: EX-9.2 Voting Trust Agreement 1 10K
9: EX-9.3 Voting Trust Agreement 1 10K
10: EX-9.4 Voting Trust Agreement 1 10K
11: EX-10.1 Material Contract 17 57K
12: EX-10.2 Material Contract 16 57K
13: EX-10.3 Material Contract 13 47K
14: EX-10.35 Material Contract 12 55K
15: EX-10.36 Material Contract 12 55K
16: EX-10.37 Material Contract 12 55K
17: EX-10.38 Material Contract 11 45K
18: EX-10.39 Material Contract 10 40K
19: EX-10.40 Material Contract 1 10K
20: EX-10.41 Material Contract 23 81K
21: EX-10.42 Material Contract 6 22K
22: EX-10.43 Material Contract 5 23K
23: EX-10.44 Material Contract 6 25K
24: EX-10.45 Material Contract 7 30K
25: EX-10.46 Material Contract 2 11K
26: EX-23.1 Consent of Experts or Counsel 1 8K
MERCHANDISING LICENSE AGREEMENT
This Merchandising License Agreement between Licensee and Licensor as set forth
below consists of this Schedule I and the Standard Terms and Conditions attached
hereto and incorporated by this reference.
- SCHEDULE I -
Our RMS #32184
AGREEMENT DATE:
January 10, 1996.
PROPRIETARY SUBJECT MATTER:
The animated theatrical motion picture and/or home video motion pictures
entitled "The Land Before Time" (I, II and III) (collectively herein "Film").
CHARACTER/ARTWORK:
All characters and artwork as embodied in the Film and all artwork and other
pertinent materials that Universal controls, including all major performers. No
music rights are granted herein. If any stills and/or clips are used, Licensee
shall be solely responsible for obtaining separate performer permission if
required, and paying all requisite third party performer, Guild or union fees.
LICENSEE:
Sound Source Interactive
2985 E. Hillcrest Drive, Suite A
Westlake Village, CA 91362
Attn: Vincent Bitetti
LICENSOR:
MCA/Universal Merchandising, Inc.
100 Universal City Plaza
Universal City, CA 91603
LICENSOR CONTACT PERSON:
Noah Dudley.
ARTICLES:
a) one (1) stand alone CD-ROM interactive Moviebook ("Book") consumer software
product, and b) one (1) edutainment CD-ROM activity center ("Center").
a) The Book will be for children in the three to ten-year-old market,
containing a linear retelling of the story. All
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interactive features shall be story-related, which features may include
interspersed full-motion video clips, "3-D" sound, on-line dictionary,
electronic bookmarks, a Who's Who section, an optional "Read To Me" mode, and
story-related educational quizzes, puzzles and appropriate animation and "sound-
event" buttons.
The entire unified product shall he compatible only with individual, stand-alone
Power PC personal computers which utilize Microsoft operating system (CD-ROM
and/or floppy disk electronic delivery formats).
The electronically developed content of the Licensed Articles will not be
adapted, ported, or in any way transferred, in its present or modified state, to
any software format other than those specified herein above. Further, the
software formats authorized herein shall be compatible only with those
electronic delivery systems specified herein above; all other electronic
delivery systems are excluded.
b) one edutainment CD-ROM Activity Center for children ages 3-12 containing
interactive features that may include: Creature Encyclopedia, Geography
oriented-interface, spelling games, musical games, puzzles, concentration skill
activities, maze games, matching games, painting activity, print and color
pages, as well as multimedia "hot buttons" soundtrack and sound effects,
text/story element, video clips photos, illustrations/animation and "virtual"
exploratory 3D front end interface-for navigating the environment.
The entire unified product will be compatible only with individual, stand alone
IBM and compatibles, Apple and Power PC personal computers which utilize either
an Apple or Microsoft operating system (CD-ROM and/or floppy disk electronic
delivery formats).
TERRITORY:
Worldwide in English and in applicable local language within each separate
territory.
TERM:
Commencing upon execution hereof and continuing until December 31, 1997.
ADVANCE:
$17,500 payable as follows:
$5,000 upon Licensee's execution hereof; $5,000 upon Licensee's commencement of
development of either of the Articles; $7,500 upon Licensor's approval of a
final product.
GUARANTEE:
$35,000.
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ROYALTY RATE:
10%.
MARKETING DATE:
TBD
DISTRIBUTION/SHIPPING DATE:
TBD
EXCLUSIVITY:
This license is exclusive to Licensee.
COPYRIGHT AND TRADEMARK NOTICE:
To be provided by Licensor.
ADDITIONAL INSUREDS/INDEMNITIES:
Amblin Entertainment
SELL OFF PERIOD:
120 days.
INITIAL HERE: /s/ [Illegible] (LICENSOR)
----------------
INITIAL HERE: /s/ VB (LICENSEE)
----------------
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STANDARD TERMS AND CONDITIONS
MERCHANDISING LICENSE AGREEMENT
1. PARTIES: This AGREEMENT is entered into by and between MCA/UNIVERSAL
MERCHANDISING, INC., 100 Universal City Plaza, Universal City, California 91608,
(herein called "Licensor"), and Licensee, at the address set forth in Schedule
I, which is attached hereto and incorporated herein by this reference.
2. LICENSE: Upon execution of this Agreement, Licensee is granted the license
to use the Proprietary Subject Matter ("PSM") solely in connection with the
manufacture, sale and distribution of the Articles during the Term and in the
Territory set forth in Schedule I.
3. TERRITORY: The Articles may be distributed only in the Territory as set
forth in Schedule I. Licensee shall also impose the obligation on its customers
to sell the Articles only within the Territory.
4. TERM: The Term of the Agreement shall commence upon execution of this
Agreement and shall expire on the date set forth in Schedule I unless sooner
terminated as provided herein.
5. PAYMENT: Licensee shall pay to Licensor the following:
(a) ADVANCE: A non-refundable, non-returnable advance payable upon the
execution hereof. Royalties earned hereunder shall be offset against the
Advance.
(b) ROYALTY: The royalty set forth in Schedule I based upon the net
invoice amount for goods sold without deductions of any sort (such as
manufacturing costs, freight, distribution costs, advertising costs, marketing
or promotion costs and trade discounts) less actual cash returns and credit
returns for defective merchandise and actual bad debts not to exceed 5% of total
sales. The aforementioned royalty shall be payable on all Articles distributed
by Licensee, whether or not billed.
Royalty reports in full detail including a product sales breakdown by style
number, article, artwork and country, and payments shall be made quarterly
within 45 days after each calendar quarter. If such royalty report and/or
payment in any calendar quarter is late, Licensee shall have a cure period of 30
days from the due date to provide to Licensor the required royalty report and/or
payment. If any royalty payment is late, interest shall accrue thereon from the
due date at the lesser of the common prime interest rate or the maximum rate
permitted by law.
(c) GUARANTEE: As of 45 days following expiration hereof, Licensee
guarantees to pay any difference between royalties paid and the guaranteed
minimum royalty ("Guarantee") set forth in Schedule I.
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6. MANUFACTURING AND DISTRIBUTION OBLIGATIONS: Licensor may terminate this
Agreement or terminate the rights granted to Licensee with respect to any
licensed Article if Licensee:
(a) fails to submit a first level prototype within four months of
execution hereof; or
(b) fails to start manufacturing such Articles within two months after the
first level prototype is approved by Licensor.
In the event Licensee fails to meet the Marketing and/or Shipping Date for
any Article, Licensor shall have the right, upon 15 days prior written notice to
Licensee, to terminate the rights granted to Licensee with respect to such
Article, without reducing the Guarantee required to be paid to Licensor by
Licensee hereunder.
If, subsequent to the commencement of marketing and distribution of any
Article, Licensee fails to actively continue marketing and distributing any
design or style ("SKU") of the Articles, Licensor, in addition to any and all
other remedies available to it hereunder, may terminate the license granted
hereunder, with respect to such SKU of the Articles.
If, subsequent to the commencement of marketing and distribution of any
Article, Licensee fails to actively continue marketing and distributing Articles
based upon or derivative of one of the characters or elements licensed
hereunder, Licensor, in addition to any and all other remedies available
hereunder, may terminate the license granted hereunder with respect to such
character or element.
If, subsequent to the commencement of marketing and distribution of any
Article, Licensee fails to actively continue marketing and distributing Articles
in any state, country or substantial portion of the Territory licensed hereunder
Licensor, in addition to any and all other remedies available hereunder, may
terminate the license granted hereunder with respect to such portion of the
Territory.
7. APPROVAL/QUALITY OF MERCHANDISE/SAMPLES: Licensee undertakes that the
Articles as well as all packaging, hang tags, labels, press releases,
advertising, promotion display or other material prepared in connection with the
Articles ("Collateral Materials") shall be of the highest standard and quality
and shall ensure that all Articles and the distribution thereof comply with all
federal, state, and local laws and regulations.
Licensee shall submit to Licensor and Licensor shall have absolute approval
of the Licensed Articles and all Collateral Materials at all stages of the
development and application thereof. Licensee may not manufacture, use, sell,
advertise, promote, or distribute any Licensed Articles nor any Collateral
Material until and unless Licensee has received Licensor's prior written
approval. The terms of this Paragraph shall be deemed material to the
Agreement.
Any submission not expressly approved in writing by Licensor within ten
(10) days after submission shall be deemed disapproved.
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Licensor will provide Licensee with written reasons for its disapproval. All
such material submitted by Licensee to Licensor shall be at Licensee's expense.
Licensee shall supply Licensor with 10 samples of each SKU of the Articles at
the time of first distribution and a royalty shall not be payable on such
samples. Licensor may purchase additional samples as reasonably necessary at
Licensee's wholesale cost.
8. GOODWILL: Licensee acknowledges that a great deal of time and effort have
gone into developing the goodwill surrounding the Proprietary Subject Matter,
and Licensee agrees that it will not do anything which would jeopardize such
goodwill, and that any goodwill developed hereunder shall accrue to the benefit
of the trademark owner. Additionally, Licensee recognizes that the Proprietary
Subject matter and elements compromising it have a secondary meaning in the
minds of the public so that use by anyone of the foregoing without authorization
would be unlawful.
9. COPYRIGHT AND TRADEMARK:
(a) All ownership, copyrights and trademarks in Articles
licensed hereunder, as well as in all artwork, packaging, copy, literary text,
advertising material of any sort, including material developed by Licensee shall
be in such names and all such items shall bear copyright and trademark notices
and any other legal notices as Licensor directs unless otherwise specified by
Licensor, Licensor shall own all such copyrights and trademarks.
(b) Licensee agrees that it shall sign separate trademark and/or copyright
agreements with Licensor or Licensor's designee at Licensor's request and cost.
(c) Licensee agrees to inform Licensor about claims of third parties with
respect to the rights granted and the Articles manufactured hereunder.
(d) Licensor shall control absolutely all infringement litigation
involving or affecting this license. Licensor may sue in Licensee's name and
Licensee shall have no rights against Licensor for damages as a result of
Licensor's refusal to sue or its settlement of any claim.
10. FIRST USE DATA AND TRADEMARK SAMPLES:
(a) No later than fourteen (14) days following the date of the first
interstate shipment by Licensee of each Article, Licensee shall provide Licensor
with the following information and material:
(i) A shipping document, invoice or purchase order which clearly states
the date of first shipment of the Article in interstate commerce, the out-of-
state location of the recipient or buyer, and all uses of any of the Trademarks
in relation to the Article.
(ii) A photocopy of the canceled check, when available, from the buyer,
which refers to the specific invoice or purchase order.
(b) Licensee shall promptly provide, free of cost to Licensor c/o General
Counsel, six identical specimens of each
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Article including packaging.
11. RESERVATION OF RIGHTS:
(a) All of Licensor's rights not expressly granted herein to Licensee are
hereby expressly reserved to Licensor or its designees without restriction.
(b) Licensee acknowledges that the license granted herein does not include
any right, title, or interest in or to the PSM nor to any copyrights, patents,
and/or trademarks therein or associated therewith. Furthermore, this Agreement
relates solely to the PSM. Licensee is not, by virtue of this Agreement
acquiring any right whatsoever in any motion picture or television production or
other endeavor which is based upon, derivative of, or otherwise related to the
PSM, including without limitation, remakes, sequels, sound recordings,
publications, or copyrights and/or trademarks in the PSM.
(c) With respect to the PSM, Licensor reserves unto itself: and/or its
designees the right to manufacture, sell, advertise, promote, display and
otherwise exploit articles similar and/or identical to the Articles for use in
connection with premium, promotional, direct mail and/or in-theatre sales and/or
giveaways and for sale, advertising, promotion display and other exploitation in
or in connection with any and all facilities owned, operated and/or controlled
by Licensor, its parent, affiliated and/or subsidiary companies, including
without limitation articles similar or identical to the Articles and products
directly or indirectly competitive with the Articles.
(d) Without limiting the foregoing, Licensor agrees that Licensee will be
free to market the Interactive MovieBook in or sell it through direct mail
catalogs.
12. BOOKS AND RECORDS: Upon demand of Licensor no more than once per year,
Licensee shall at the expense of Licensor furnish to Licensor a detailed
statement by an independent certified public accountant, showing the number,
description, actual selling price and itemized deductions from such price of the
Articles distributed and/or sold by Licensee to the date of Licensor's demand.
All books of account and records pertaining to transactions relating to this
license shall be kept available to Licensor for at least three (3) years. On
reasonable notice, Licensor shall have the right to have an independent
certified public accountant, or Licensor's authorized representative, examine
Licensee's records. Such right survives the term of this Agreement. If a
review of Licensee's records indicates a discrepancy in Licensor's favor of ten
percent or more, Licensee shall immediately pay the balance of the Guarantee
outstanding to Licensee and any other payments that may be due.
13. INSURANCE: Licensee agrees to maintain, at its own expense, a
Comprehensive General Liability insurance policy for the entire term of this
license Agreement including the coverage parts for contractual liability
(applying to the terms and conditions of
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this Agreement), Products Liability and Personal Injury Liability, with a
minimum combined single limit of liability of not less than US$3,000,000 each
occurrence. Licensee shall provide Licensor, (MCA/UNIVERSAL MERCHANDISING,
INC.), upon execution hereof, with a policy endorsement to Licensee's Product
Liability insurance coverage or an acceptable certificate of insurance naming
UNIVERSAL CITY STUDIOS, INC. and MCA/UNIVERSAL MERCHANDISING, INC., its parent
and affiliated companies as additional insureds, as well as any Additional
Insureds that are listed in Schedule I.
14. WARRANTIES, REPRESENTATIONS & INDEMNIFICATION: Licensor warrants that it
owns or controls the rights granted hereunder. Licensor agrees to indemnify
Licensee against all claims, suits, damages and expenses, including reasonable
legal fees, arising out of Licensor's breach of its representations hereunder.
Licensee's obligations under this contract shall in no event be diminished or
deferred in the event that the Licensee shall be sued by a third party for
copyright or trademark infringement or any other matter arising out of this
license and, further, Licensee agrees that it will not assert the pendency of
such claim as an offset against or to avoid any of its obligations under the
terms of this Agreement.
Licensee shall indemnify, hold harmless, and defend Licensor, its parent,
affiliated and subsidiary companies, and its officers, directors, agents and
employees, as well as any Additional Indemnitees that are listed in Schedule I,
(collectively "Indemnitees") from and against any and all liabilities, claims,
causes of action, suits, losses, damages, fines, judgments, settlements and
expenses (including any and all reasonable legal fees and court costs) which may
be suffered, made or incurred by any of such Indemnitees arising out of any
breach or alleged breach of any of the covenants, warranties, representations
and agreements made by Licensee herein.
15. EXPIRATION: Upon the expiration of the term of this Agreement, or other
termination, all rights licensed hereunder or otherwise acquired in relation to
this Agreement shall revert to Licensor or its designees. Licensee agrees that
its failure to stop manufacture, sale and/or distribution upon expiration or
termination hereof will result in immediate irreparable damage to Licensor, that
there is no adequate remedy at law for such failure, and that in the event of
such failure, in addition to all other remedies available, Licensor shall be
entitled to injunctive relief, and no bond shall be required therefore.
16. TERMINATION OF THE AGREEMENT: Should Licensee be in default with the
statements of account and/or payments on the due dates or fail to observe or to
perform any of its other obligations under the Agreement in any way, Licensor
may terminate the present Agreement if Licensee's default has not been cured
within forty-five (45) days of notice by Licensor, except in the case where
Licensee has violated Licensor's approval process, in which case Licensor may
terminate immediately. Without limiting any of
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Licensor's rights or remedies, the guarantee shall become immediately due and
owing upon Licensee's failure to cure such default.
Licensor may terminate the present Agreement in case of total or partial
alienation of Licensee's enterprise.
If Licensee suspends its payments or if judicial proceedings for bankruptcy
or insolvency are filed or instituted against Licensee, the right's granted
herein shall automatically revert to Licensor. Any further claims shall not be
affected thereby.
17. SELL OFF: With respect only to the expiration of this Agreement in due
course, at the conclusion of the Term, and not by reason of any prior
termination, Licensee shall have the period set forth in Schedule I in which to
sell off existing inventory of the Licensed Articles subject to the terms and
conditions of this Agreement with accounting and payment therefore due 30 days
thereafter. Additionally, Licensor grants Licensee the latitude to reduce the
royalty set forth herein by 50% for actual sales at 50% of the average wholesale
selling price during the sell off period. Following such sell-off period, all
remaining inventory shall be destroyed, and a Certificate of Destruction shall
be forwarded to Licensor. Notwithstanding the foregoing, Licensee shall notify
Licensor of its intent to sell off the Articles, and Universal City Studios-
Hollywood and Universal Studios Florida shall have a right of first refusal to
purchase such Articles during the sell off period.
18. MERGER: This Agreement constitutes the entire understanding between
Licensor and Licensee. All previous representations and undertakings, whether
oral or written, have been merged herein.
19. NOTICES AND PAYMENTS: Unless otherwise directed by
Licensor, all notices shall be sent by mail or facsimile to:
MCA/UNIVERSAL MERCHANDISING, INC,
100 Universal City Plaza
Universal City, CA 91608
Attn: Controller
All payments shall be sent to the above address.
All notices to Licensee shall be sent to name and address set
forth in Schedule I.
20. ASSIGNMENT: Licensor may assign any or all its rights hereunder; but this
license and all of Licensee's rights and
obligation shall not be assigned, mortgaged, sublicensed or otherwise encumbered
by Licensee without Licensor's prior written
consent.
21. PARTNERS: The parties hereto are neither partners nor joint venturers
hereunder, and Licensee shall have no power nor authority to obligate or bind
Licensor in any manner whatsoever.
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22. AUDITING EXPENSES AND FEES: Licensor shall be entitled to
recover from Licensee all of its legal and auditing fees and expenses in the
enforcement of any provisions of this Agreement
excluding normal auditing fees as outlined in Paragraph 12.
23. MODIFICATION: This Agreement may not be modified and none of its terms may
be waived, except in writing signed by both parties.
24. WAIVER: Licensor's failure or delay to enforce any rights hereunder shall
not be a waiver of such rights or a modification of this Agreement.
25. SEVERABILITY OF PROVISIONS: Should any part of this Merchandising License
Agreement be declared void or unenforceable during the term hereof by any agency
or tribunal of competent jurisdiction, the remainder of the provisions shall
remain in full force and effect.
26. GOVERNING LAW: This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California applicable to agreements
entered into and to be performed wholly in California.
27. CONSENT TO JURISDICTION: Licensee hereby consents to the exclusive
jurisdiction of any State or Federal court empowered to enforce this Agreement
in the State of California, Los Angeles County, and waives any objection thereto
on the basis of personal jurisdiction or venue.
28. CONFIDENTIALITY: The terms and conditions of this Agreement, and any
materials provided by Licensor to Licensee in connection with the PSM shall
remain confidential except insofar as such Materials are used on the Articles or
in approved Collateral Materials, advertising and/or promotion of the Articles.
AGREED TO AND ACCEPTED BY:
MCA/UNIVERSAL MERCHANDISING, INC.
(LICENSOR)
By: /s/ [Illegible]
-------------------------------
Its:
------------------------------
SOUND SOURCE INTERACTIVE
(LICENSEE)
By: /s/ Vincent J. Bitetti
-------------------------------
Its: CEO
------------------------------
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘SB-2/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 12/31/97 | | 2 | | | | | 10QSB |
| Filed on: | | 5/9/96 |
| | 1/10/96 | | 1 |
| List all Filings |
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